IFRS 16 introduces new detailed guidance on how to account for leases. With an effective date of 1 January 2019, preparation time is now limited. How to get to the finish line in time.
IFRS 16 introduces new detailed guidance on how to account for leases. With an effective date of 1 January 2019, preparation time is now limited.
While some companies may not need to report under IFRS 16 until the end of their 2019 financial year, others will be required within the first few months, especially those providing interim IFRS financial information to stakeholders, such as banks, lenders, and shareholders.
To be ready for IFRS 16 we expect all reporters to employ a form of tooling, whether that be a spreadsheet model or a dedicated piece of software.
Many of the bigger ERP system providers have released leasing modules that can handle the new lease accounting standard. Multiple smaller, bolt-on solutions are also available in the market place.
We have noticed that some software packages may not have the capability of modelling all (transition) options and accounting policy choices that can be made under the new standard. In some cases, companies may find themselves more involved in guiding the software providers than expected. Significant time can be required to test the system and refine the setup and configuration to ensure the output is compliant with IFRS 16.
KPMG can help you in getting to the finish line with:
Four options are available to run your lease calculations in time:
*Details are available on request